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Toyota's safety blitz may delay product plan

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Toyota's safety blitz may delay product plan

Product development, growth may slow as engineers are shifted

Hans Greimel

Automotive News -- May 17, 2010 - 12:01 am ET

TOYOTA CITY, Japan -- Struggling to fix its quality problems, Toyota is reassigning top engineers and executives to new safety-related duties -- a move that could slow product development and curb the company's breakneck expansion.

Since its global recall crisis erupted in January, Toyota has added layers of bureaucracy, including task forces, rapid-response teams, a business reform committee, even a new division -- all to improve safety and prevent a relapse.

Now, as the world's biggest automaker shifts workers and resources from other programs, it is forced to re-evaluate some projects.

"We are trying to find the engineering man-hours for these quality issues," Seigo Kuzumaki, project general manager for vehicle safety, told Automotive News last week. The surging demand for engineers in safety is forcing Toyota to rebalance resources in product development while trying to keep products on schedule, he said. In some cases, that may result in slowed product development, but the company is trying to avoid this, Kuzumaki said.

"We will review the product development plan so that we don't have strains," he said. "Some product projects are already under review."

The safety executive did not say what projects are being looked at, and he added that "nobody is confused because we know what's to be done."

Balancing act

Toyota's new balancing act is highlighted by this month's creation of a Design Quality Innovation Division, led by Managing Officer Kiyotaka Ise. Ise adds the new division to his portfolio, which already included duties overseeing sports vehicles, product development and Lexus development.

The new unit has a staff of 50 and is charged with channeling customer feedback into product development, Kuzumaki said.

That step follows several other organizations created since January to beef up quality:

-- The Special Committee for Global Quality.

-- A North American Quality Task Force headed by Steve St. Angelo, a top North American manufacturing executive.

-- Six new Swift Market Analysis Response Teams for the United States.

-- A corporate Business Reform Committee to improve internal communication.

-- An independent North American Quality Advisory Panel.

Even before the recall crisis hit last autumn, Toyota's human resources were stretched to the limit. President Akio Toyoda has said repeatedly that the problems stem partly from the inability of human resource development to keep pace with Toyota's explosive international growth.

The company's global employee head count has shot up to 321,000 from 183,000 a decade ago.

Toyota added a sixth executive vice president late last month to its top tier of management to help cope with the company's ongoing quality and recall crisis.

The appointment of Satoshi Ozawa to the board position, in charge of Europe, human resources and accounting, frees Executive Vice President Shinichi Sasaki to focus on quality. Sasaki previously had handled both Europe and quality.

Direct line

Some analysts warn that product development will slow as Toyota takes more time to review its quality and safety processes and diverts resources to those areas.

But Toyota says the move is meant to speed up decision-making in the crucial matter of making cars safer and responding to customer complaints. This will be partly achieved through delegating more power and autonomy to regional operations so they can act faster.

St. Angelo, the newly appointed chief quality officer for North America, acknowledged that human resource development was a weak link. But the changes aim to improve the flow of information. He now has a "direct line" to talk with Akio Toyoda any time he wants, he said.

But even St. Angelo's plans call for more hires and additional resources -- in the form of a new North American training center and the new rapid-response teams, for starters.

"Are there going to be more jobs added? Probably," St. Angelo said in a separate interview last month. "But I don't think it's more bureaucracy. I think it's faster action."

The right compromise

Kuzumaki said shifting resources to safety was the right compromise at the right time. Toyota needs to move faster to respond to customer needs, he said.

The recent recall of the Lexus GX 460 SUV because of inadequate stability control software -- deemed a "safety risk" by Consumer Reports magazine -- underscored how Toyota's own standards were out of line with customer expectations, Kuzumaki noted.

"One lesson we learned is that customer expectations are higher than what we thought they were," he said, adding that if overhauling safety meant slowing product, so be it.

"Whether that leads to a slowdown or not, we are taking these measures because we want to respond to the needs of our customers quickly," Kuzumaki said. "So we don't think this is a bad thing."

Read more: http://www.autonews.com/article/20100517/OEM01/305179966/1424#ixzz0oBsKLzcV

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Can they really delay the Corolla and Camry much longer? They are soon going to have the oldest models in the class at this rate. Cruze and Focus will be here soon. Malibu, Passat, Regal, Sebring, are all waiting in the wings.

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Since its global recall crisis erupted in January, Toyota has added layers of bureaucracy, including task forces, rapid-response teams, a business reform committee, even a new division -- all to improve safety and prevent a relapse.

And Toyota just created a new problem for itself. With more bureaucracy, the product -- the cars -- will only continue to suffer. Perhaps safety won't take a insane nose dive again, but with more bureaucrats working against designers and engineers, Toyotas will instead nose dive into being even more boring and lackluster to own and drive. It's a brand new nightmare and it hasn't even started yet. Akio Toyoda said that he wanted the Camry to be "fun to drive again." He will need all of the luck in the world to accomplish that because now there are even more people behind the scenes to tug his strings and suggest him to do otherwise.

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